Hong Kong!
On the morning of November 8, after waking up from a night’s sleep, the residents of Hong Kong Island headed to the newsstands as usual to buy their favorite newspapers.
In this era of relatively scarce entertainment and limited access to information, most literate residents had the habit of reading newspapers and magazines.
However, when the residents picked up their papers today, they suddenly discovered that multiple newspapers and magazines were all reporting the same thing: “Gold prices are about to plummet!”
If an ordinary newspaper had reported this, the public might not have paid much attention—after all, the island’s media was notorious for having no scruples; no matter the issue, as long as it was trending, they’d jump on the bandwagon.
But with gold investment currently so hot, it’s inevitable that some would try to ride this wave to boost sales.
Moreover, with all investors bullish on gold, simply going against the grain and predicting a downturn is likely to attract significant attention.
But when people saw that the South China Evening News was the first to report this, it was a different story.
As one of Hong Kong’s four major newspapers, the South China Evening News has always been known for its rigorous reporting. Unlike those unscrupulous tabloids, it generally doesn’t resort to any means necessary to grab headlines or boost circulation.
What was even more shocking was that the South China Evening Post actually ran this story as its front-page headline, relegating even the Governor’s political photo op visiting children at a welfare home to the second page—a clear indication of the newspaper’s seriousness regarding this matter.
So, when people saw this news, they were all taken aback.
It’s important to note that gold and financial commodity trading on Hong Kong Island had been incredibly hot recently, with one-third of the island’s investors participating.
Thanks to everyone’s collective efforts, Hong Kong’s gold price had skyrocketed, surging past $606 per ounce—about $7 higher than the international price.
Investors were pouring money into the market with such fervor because they believed gold prices wouldn’t drop anytime soon; they even expected international gold prices to surge to $850 per ounce, just as they had last year.
They weren’t just blindly following the trend; the main reason was that gold had performed exceptionally strongly over the past few months.
In August, the international gold price was just over $200 per ounce, but by September it had reached $500 per ounce—a full doubling.
By October, it had approached $600 per ounce—a staggering 150% surge in just three months.
Add to that the recent global political turmoil: the Bear Alliance taught the world a lesson with its invincible “steel flood,” and its military exercises simulating the conquest of Europe in eight days not only terrified Western nations but also pushed international gold prices to new highs.
And now that the threat from the Bear Alliance still looms, no one believes gold prices will suddenly crash.
More importantly, as a unique metal, gold’s price fluctuations follow cyclical patterns.
Even if prices do drop, the decline won’t be significant, and everyone still has a chance to break even.
Take, for example, those who got stuck in a losing position during last year’s price crash—haven’t they been given a chance now? At worst, they simply won’t make a profit during this cycle, but most people believe they can afford to wait it out.
At the very least, once the cycle runs its course, they can simply exchange their holdings for physical gold and wait for it to appreciate—after all, it is gold.
In contrast, the current performance of Hong Kong’s property market or stock market is simply baffling. A stock market crash has halved property prices, while stocks have plummeted even further—many people don’t even have a chance to break even.
To put it bluntly, while investors choose gold because they perceive it as relatively low-risk, the bigger reason is that they simply have no better investment options.
After all, other investments carry even greater risks!
However, this report in the South China Evening News has left investors feeling uneasy. The reporter cited an analysis by a senior economist at the Far East Stock Exchange, stating: “Due to the global economic environment, international gold prices are about to undergo a cyclical decline. Furthermore, with the rise of the dollar-denominated oil market, the trend toward the de-monetization of gold is becoming increasingly evident.”
Consequently, the price drop is expected to range between 50% and 60%, and gold prices will subsequently enter a prolonged period of weakness—lasting anywhere from three to two years, or as long as a decade.
In addition to the Nanhua Evening News, numerous other newspapers and magazines have also covered this story, all unanimously predicting a decline in gold prices.
Moreover, each outlet presents its case with great conviction, as if they could see the future.
After reading these reports, citizens who have invested in gold are naturally panicking—many of them have poured their life savings into it.
If prices were to suddenly plummet, the consequences for them could be catastrophic.
Consequently, everyone rushed to the stock exchange to see if gold prices had actually fallen.
Upon arriving at the exchange, they discovered that international gold prices had barely changed. Aside from a slight dip in quotes on the New York gold futures market, prices in the Chicago, London, and Zurich gold markets remained stable.
This news brought a collective sigh of relief!
However, the analyses in those newspapers and magazines had taken root in their minds like a spell. Seeing this, some investors with weaker resolve immediately made the painful decision to sell off their gold financial contracts.
For seasoned veterans in the investment world, the primary goal is to preserve capital; making a profit comes second.
You may be eyeing their high returns, but they might be eyeing your principal. You can’t risk your life savings just for a lollipop.
It’s fair to say that this barrage of media coverage has muddied the waters in Hong Kong’s investment community!
And this is just the beginning!
…….
At 9:00 a.m., Li Futao, a prominent figure in Hong Kong’s business community, gave an exclusive interview to a TV station. During the interview, the host specifically asked Li Futao for his views on the current gold investment craze sweeping Hong Kong.
Surprisingly, Li Futao stated outright that he was not optimistic about gold’s performance.
In Li Futao’s words, the price of gold has already peaked, and there is currently no room for further appreciation.
Unless the petrodollar system collapses and the U.S. dollar is re-pegged to gold,
Otherwise, the price of gold will soon fall, and could even crash.
At the same time, Li Futiao warned investors who still hold physical gold or gold financial products: if you don’t want to end up on the rooftop enjoying the “unlimited” view, you’d better cut your losses as soon as possible.
Even taking a small loss is better than facing a sudden, catastrophic plunge in gold prices!
Furthermore, he advised investors to avoid investing in gold during this period, and if they must invest, not to go long on gold, or else the consequences might be more than they can bear!
Li Futao wields immense influence on Hong Kong Island, and since he made these remarks during an exclusive interview—clearly after careful consideration—no one will dismiss his warning lightly.
Most importantly, everyone knows Li Futao’s character; his integrity is widely recognized in the industry. Since he has so explicitly stated that he does not see a bright future for gold investments, it clearly indicates that gold truly carries significant risks.
Under these circumstances, a large number of gold investors quickly chose to pull out.
There was no other choice; the current situation was simply too unpredictable. If they didn’t act fast, they might very well find themselves trapped in a losing position.
Overnight, the Hong Kong stock market was flooded with sell orders for gold financial products, while others took their physical gold to banks and shops to sell.
With so many people selling, the price of gold was naturally affected.
Less than two hours after Li Futao’s exclusive interview, the local gold price in Hong Kong had dropped from $606 per ounce to $601 per ounce—a plunge of $5 per ounce.
The turmoil in the gold market immediately drew the attention of all investors in Hong Kong Island—and caused unease among certain individuals!
………